And Speaking of Scams ...

...an old scam is making a come back.

Most of us homeowners have had our mortgage servicer changed. We get the letter telling us where to send our house payments from now on. Well, con artists have found a way to hijack a payment or two!

First comes the letter from a fictitious company that says it has begun servicing your loan. You get your new "account number," along with coupons for your mortgage payments. Unfortunately, by the time you figure out your loan has not really changed servicers, you are already out a payment or two!

So how do you know the difference between a real transfer of mortgage servicers and a con?

• Under the law, your current servicer is required to send a "goodbye" letter notifying you that your payments should be sent to a new company as of a certain date.
• A week or two later, the law says you should receive a second letter, which, by law, should include a welcome missive from the new servicer with the details of the mortgage payment, which includes a breakdown among principal, interest, and escrow. This package is also likely to include a few payment coupons, if not a brand-new coupon book, and self-addressed printed envelopes for borrowers to make payments.
• Both the goodbye and welcome letter should include the original mortgage loan number. if either letter does not, or if the information included in one doesn't match what's in the other, you should call your original servicer to inquire.
• If you receive only one letter, be extra cautious. Even if everything appears to be standard procedure, you are still advised to call the first company's toll-free number just to be sure!

SELLERS! Don't Get Scammed!

Misfortune seems to bring out the good in most people; however, there are always some out there who wish to turn someone's misfortune into good for themselves alone!

A new study by CoreLogic shows banks and distressed home sellers will lose more than $375 million this year by selling undervalued houses to third-party buyers, which generally result in a quick sell and profit and tend to be fraudulent sales.

According to law enforcement and banking industry experts, the fraud works like this: Investor groups partner with local real estate agents whose job is to spot borrowers in financial distress and persuade the homeowners to sell to investors in a short sale at a low price. Then, the agent contacts the bank with the investors'
short-sale offer. So far so good. At least it appears so!

Meanwhile, the agent finds a buyer who wants to purchase the property for a higher price than that which the investor buyer is paying for the property, but the agent never presents this offer to the bank, nor does he tell the homeowner about this buyer. This new buyer knows nothing about the investor. To back up the investors' low offer - the only offer the bank is aware of - the agent produces an appraisal that confirms the low valuation. The bank then approves the sale and the investment group purchases the property. After the closing, the investors then sell the house to the other buyer at a higher price. The agent and investors then split the profits. The original homeowner never knows what hits them!

How do you keep this from happening to you? Or your friends who may be considering selling their home "short" in order to keep from foreclosure? Use a REALTOR you can trust. One who has experience in Distressed Property Sales. One who is looking out for the best interest of the seller.

I have had many years of experience in foreclosures, pre-foreclosures and short sales, on both the buyer side and the seller side. I am a Certified Distressed Property Expert. And most importantly, I can be trusted. Call me with any questions you have about your property - what it is worth, should you short sell or foreclose? Can you get a loan remodification? What options do you have? I would be glad to help you!

Home Improvements That Add Value

We are often asked what home improvements are cost effective. In these economic times, the answer to that is more important than ever!

Homeowners concerned with making home improvements that will pay off when it’s time to sell the property, should consider the following tips.

1. The first improvement/repair homeowners should consider are those that impact the home’s basic structures and systems. Potential home buyers generally do not want to face expensive repairs, and if items such as the foundation, roof, air conditioning, water heater, or other basic structure need to be fixed, the property will be considered a fixer-upper and its market price
will be discounted accordingly. It is very hard for homeowners to swallow that their home would be sold as a fixer-upper, but that is the nature of the buyer today! And it is, what it is! We can't stress home maintenance enough! It is your home's biggest selling point.

2. Some minor replacements will produce big results for minimal cost. Replacing and coordinating bathroom and kitchen hardware and fixtures are generally inexpensive, but tend to make a big difference. The same can be said for getting rid of dated finishes, such as old wallpaper, paneling and brass light fixtures.

3. Kitchens, bathrooms and master bedrooms sell homes everywhere in the country. And here in San Diego, a well kept yard/patio/balcony is a huge selling point, as well. Minor remodeling and fine tuning of these three or four areas of your home will pay off when it comes time to sell.

Homeowners who don’t know when or even if they will be able to sell their home are advised to choose home improvement projects carefully. Unless the home is located in an upscale neighborhood and the property already is immaculate, owners can skip expensive upgrades and
focus on the fundamentals.

Call me if you have any questions regarding a proposed project, even if you are not ready to sell. I would be happy to offer you my expert opinion based on showing hundreds of buyers hundreds of homes! Happy DIY'ing!

REAL ESTATE: Finally a Good Investment?

The housing market still looks pretty bleak: There were a record one million foreclosures last year, home prices are still falling in many regions and the number of "underwater" properties is at a record high.

And things don't look much better in other areas of real estate. The number of construction jobs continues to decline, even as other parts of the economy have added jobs. And mortgage rates have moved higher as long-term Treasury yields have backed up during the past few months.

Basically, the real estate market remains a mess.

Real estate encompasses a wide range of markets – homes, apartments, hospitals, office buildings, strip malls, dormitories and other properties. But for our purposes, let's focus on residential real estate, or homes. Here are four reasons to think residential real estate might represent a bargain – with one big caveat.

Everyone hates homes.

Homes are probably the most hated asset class in the country. That's what happens when a bubble bursts. People avoid thinking about the value of their home. Sellers moan about no offers, buyers gripe about impossible lending requirements.

Hatred of an asset is often the precursor to contrarian interest, and being contrarian is at the heart of many investment strategies. To paraphrase Warren Buffett, be fearful when others are greedy and greedy when others are fearful. Mr. Buffett backed that idea when he invested in the stock market in the teeth of the financial crisis in late 2008 and early 2009.

Of course, being contrarian for its own sake isn't wise investing. Gold was hated for years ("dead money") before it recently became an attractive asset class. Still, a lot of smart ideas begin with the question: What does everyone hate?

Smart people are buying real estate.

This cohort is led by John Paulson, the hedge-fund manager who made $20 billion betting against the housing bubble. Last fall he said in a speech: "If you don't own a home buy one. If you own one home, buy another one, and if you own two homes buy a third and lend your relatives the money to buy a home."

Why is Mr. Paulson so adamant? Because he believes long-term interest rates are not going to get much lower. They have, in fact, risen since he gave that speech, but they remain remarkably low by historic standards. Low rates and the expectation that home prices will rise is his argument. For his part, Mr. Buffett has predicted the housing market will bottom this year.

Real estate performs well during inflation.

There's no inflation these days, but when buying a home one should take a longer view. And the longer view shows that the economy has enjoyed a disinflationary period since the early 1980s. A number of folks think that cycle is slowly reversing itself.

If that's the case, then convention would argue for holding assets that do well in an inflationary environment. That includes Treasury Inflation Protected Securities, commodities and real estate. Remember that during the stagflation nightmare of the 1970s, real estate had a strong run.

Inflation isn't a significant issue in the U.S., but it's a growing problem elsewhere. China and India have taken steps to fight inflation, the euro zone is getting flickers of inflation and the U.K. has had oddly higher prices (above 3%) for an extended period of time. If the cycle is slowly turning, real estate makes more sense.

Demand may be coming back.

Supply isn't as out of whack as it used to be. At the end of November, home builders reported 197,000 new homes on the market, the lowest level since 1968, according to Yardeni Research. The National Association of Realtors reports that the inventory of existing homes for sale fell 4% to 3.71 million homes, which represents a 9.5-month supply at the current sales pace, down from a 10.5-month supply in October.

Those aren't pretty numbers, of course, but they are moving in the correct direction. And that may be a reason that many home builder stocks, such as KB Home ( KBH: 14.79*, -0.19, -1.26% ) , Hovnanian ( HOV: 4.45*, -0.06, -1.33% ) , Pulte ( PHA: 24.06*, +0.02, +0.08% ) and Toll Brothers ( TOL: 20.40*, -0.30, -1.44% ) , have come off their lows in the past several weeks.

It's all comes down to jobs. There are a zillion caveats to any positive home thesis, but the big one is unemployment. If the economy is not creating jobs, the chance of a rebound in housing is diminished. It's hard to buy a home without a job, and folks who aren't working don't want to take long-term risks.

The job market is still struggling and the debate is hot about when it will recover. Optimists see recovery this year. Pessimists see pain for several years ahead. How this X factor gets resolved will say a great deal about whether housing will rebound.

Taken from an article on SmartMoney.com. Read more: 4 Reasons to Buy a Home Now - SmartMoney.com http://www.smartmoney.com/personal-finance/real-estate/-1295050347411/#ixzz1BhVVZ0hR

A little-known strategy for cutting mortgage payments

Homeowners looking to lower their monthly mortgage payments and reduce their interest rate may be able to do so without refinancing. A little-known strategy called recasting or re-amortization is available through some mortgage lenders and servicers, and eliminates the hefty fees and daunting credit requirements of refinancing.

• Re-amortization requires borrowers pay off a lump sum of the principal amount on the mortgage and asking to have the monthly payments reset according to the original interest rate and loan terms. The lump sum reduces the principal, so the new monthly payments decrease slightly and interest paid over the life of the loan is reduced.
• Lenders typically charge an administrative fee of $150 or more to re-amortize a mortgage; however, borrowers are not required to pay closing costs or submit to another credit check.
• Re-amortizing works well for homeowners unable to qualify for refinancing, especially those who are self employed or have low poor credit.
• Homeowners considering re-amortizing their mortgage should be aware that some lenders require a minimum amount to be paid toward the principal in the lump sum. JPMorgan Chase, for example, charges a $150 fee and requires a minimum $5,000 payment toward the principal.
• Another challenge is finding a lender, or loan servicer, that offers re-amortizing. JPMorgan Chase and Bank of America exclude loans backed by the Federal Housing Administration and Dept. of Veterans Affairs, and loans that were sold off and securitized may also need investor approval. By Lynnley Browning

If you're in a mortgage pickle, it may be worth a look-see into this strategy. Call me if you have questions and I'll try to point you in the right direction! - Mike

How-To Videos on YouTube About Homebuying

Especially in today’s housing market, the prospect of buying a home can seem overwhelming for many Americans who may not be aware of how to begin the process of shopping for a home or even a mortgage. To help navigate this process, the U.S. Department of Housing and Urban Development (HUD) and the National Association of Realtors® (NAR) unveiled three how-to videos to help prospective homeowners find a home they can afford, shop for a mortgage they can sustain, and what to expect when they go to closing.

“Educating consumers about the home buying process is at the heart of what Realtors® do,” said 2010 National Association of Realtors® President Vicki Cox Golder. “Informed home buyers create the conditions necessary for responsible, sustainable home ownership, and we’re very happy to be a part of this project.”

HUD’s videos are easily accessible from both HUD and NAR’s websites as well as from HUD’s YouTube channel. They include:

Shopping for your Home – The homebuying process obviously starts with finding a place you’ll want to call home. This short video will instruct viewers on assessing how much of a home you can afford, working with a real estate agent and what happens once you find the home you want to buy. Housing counselors can assist home buyers and home owners on issues such as home buying, fair housing, credit issues, and foreclosure prevention.

Shopping for your Loan – Once you’ve found the home of your dreams, the next step is to shop for a mortgage loan. This video will help prospective buyers use the good faith estimate (GFE), which is a form that spells out the terms of a loan offer, to shop for the best loan for them. Viewers will learn how to use the GFE to determine how long an interest rate is available for a particular loan and how to identify key loan terms and costs of a particular loan offer. HUD suggests buyers shop and compare GFEs from multiple mortgage brokers and/or lenders in order to get the best loan for their situation, and I heartily concur.

Closing the Deal – Finally, this video walks the viewers through the actual closing process including how to make sure the loan they were offered closely matches what they encounter at the settlement table. In particular, HUD will walk the viewer through the HUD-1 Settlement Statement and demonstrate ways buyers can compare their actual costs with those reflected on their Good Faith Estimate.

HUD partnered with NAR because a real estate agent is often the primary point of contact for homebuyers and HUD believes real estate agents are in a great position to provide these videos to their clients as they move through key areas in the homebuying process.

To view HUD’s new homebuyer education videos, visit HUD’s YouTube channel at www.youtube.com/HUDchannel.

As Your Personal REALTOR, I am here to answer any of your personal questions about homeownership, buying, selling and avoiding foreclosure. Don't hestitate to contact me!

Help for Troubled California Homeowners On Hold ... But Not For Long

California expects mortgage-aid program to begin in weeks.

The California Housing Finance Agency (CalHFA) reported this week that its “Keep Your Home California” program will be delayed because of logistical issues with the program. The program was scheduled to begin Monday, Nov. 1.

· The “Keep Your Home California” program is a $1.83 billion government aid program that will pay down loan balances and provide monthly cash assistance to struggling California homeowners.

· One of the logistical complications that has caused the delay is the fact that Fannie Mae and Freddie Mac last week instructed their loan servicers to participate in the program, dramatically increasing the number of potentially eligible homeowners.

· Funded with federal money, the program offers four different types of cash assistance for an estimated 100,000 low- to moderate-income California homeowners. Additionally, eligible borrowers must have endured some sort of loss of income.

· The two primary forms of aid include $875 million dedicated toward unemployed Californians who need help making their monthly payments, and $790 million to be used to directly reduce mortgage loan balances.

· Although the program has been delayed for several weeks, homeowners struggling to make their mortgage payments are advised to not wait for assistance programs to begin before contacting their servicer or lender. Instead, homeowners should begin working with their lender or servicer at the first sign of difficulty.

· More information about the “Keep Your Home California” program can be found at www.keepyourhomecalifornia.org. A toll-free hotline soon will be established.

As a Certified Distressed Property Expert, I can help you navigate your way through the maze of programs and what is available for you. Contact me for help today!